Over at the Organizations, Occupations and Work blog, a fellow sociologist blogger, Matt Vidal, has an important analysis of some recent data on unemployment and employment indicating severe racial inequalities. And he raises the issue of the dicey future of the black middle class. He begins with this statement about this New York Times article:
A recent New York Times article reports on how the long downturn of the US economy has hit the public sector hard, which, in turn, has been devastating for the black middle class. The article notes that black workers are about one third more likely than whites to be employed in the public sector. Blacks have historically been more able to find work in the public sector, as they faced more discrimination in the private sector. Overall, unemployment rates for blacks have consistently been about twice that for whites, with the black unemployment rate peaking at 16.7% last summer.
I call your attention to his good summary of some of the key issues, with some good links. His conclusion will not come as a surprise to readers of this sociological blog:
The upshot is that any way to address the problem most be organizational or structural, not individual.
From a pure wealth resource perspective the black middle class was decimated when the mortgage crash burst the housing bubble. First of all the emerging black middle class concentrated the bulk of its financial resources in real estate, which appeared prior to the crash as the fastest appreciating asset in the nation.
I should like point out that I am not talking about those people who speculated on taking out mortgages that were normally well beyond the capacity of their available income. Rather I am talking about African Americans whose original mortgages were either paid off or close to being paid off; and they had the misfortune to be suckered into taking out a second mortgage or a home improvement loan. I am talking about those black folks who were bamboozeled into taking out loans against the equity in their property by mortgage lenders like Countryside. Though it will never be totalled up, I would speculate that across the nation African Americans likely lost over $1.5 trillion in the value of solid equity inherent in their respctive real estate holdings. This was the amount of money lost long before the economy tanked in 2008 and the value of homes across the nation started their long unchecked decline in value. It would be literally impossible to add the original $1.5 trillion loss to any estimate of what the final loss in value of people’s homes will finally total up to.
The follow on economic depression compounded the financial problems of middle class African Americans due to the nation wide flood of unemployment. This condition remains with us to this present day, with no significant relief anywhere to be seen or forecast.
Just to add to your point, many black families weren’t only “bamboozled” into taking bad loans, even more were offered sub-prime loans when they qualified for prime loans. Some mortgage companies even lied about the qualifications of applicants, ie knowing writing false info on application forms without the knowledge of applicants.
The black middle class was robbed. Plain and simple. We didn’t land on Plymouth Rock. Plymouth Rock landed on us, destroyed our ship, then charged us for its services.
AMEN, AMEN, and AMEN. Thanks for these additional facts that I unfortunately left out of my comment.
Don’t sweat it!
Apropos the erasure of black wealth due to foreclosures, here are some admittedly dated estimates:
According to United for a Fair Economy the foreclosure crisis will result in blacks losing between $71 billion and $122 billion while Hispanic borrowers will lose between $76 billion and $129 billion.
Rivera, Amaad, 2008. /State of the Dream 2008: Foreclosed/. Boston: United for a Fair Economy.
Last hired first fired.